Health care fraud: Father, son scheme Blue Cross out of over $16.7 million

A father and son duo out of Dallas were convicted of multiple felony counts related to a $16.7 million health care fraud scheme involving hearing aids and free glasses.

The decision was reached by a jury following a 10-day trial before U.S. Chief District Judge Barbara M.G. Lynn, according to a news release from the U.S. Attorney’s Office for the Northern District of Texas.

The jury also found Terry Anderson guilty on two additional health care fraud counts.

The Andersons each face a maximum 10 years in federal prison and a $250,000 fine for the conspiracy count, and for each of the substantive health care fraud counts.

The aggravated identity theft counts carry a mandatory two years in federal prison and a fine of up to $250,000.

The superseding indictment includes a forfeiture notice requiring the Andersons to forfeit a 300-acre ranch in Bosque County, three vehicles and more than $3.1 million that was seized from nine financial accounts in December 2015, the news release stated.

According to the news release:

During the trial, evidence was present showing the father and son duo submitted fraudulent claims to Blue Cross and Blue Shield of Texas for hearing aids on behalf of employees of American Airlines, Inc.

.(Photo: Stockbyte, Getty Images)

The hearing aids were not needed and, in many cases, never dispensed to the patient.

The claims were submitted through Anderson Optical & Hearing Aids Center – the pair’s family-owned business of over 45 years that had locations in Arlington and Bedford.

The Andersons engaged in fraudulent marketing practices to increase the number of claims they submitted.

In one instance, they promised patients a free pair of high-end sunglasses or prescription eyeglasses, in exchange for taking a free hearing test.

After completing the exams, the Andersons told patients they had slight to mild hearing loss and required them to sign an order for hearing aids before giving away the free glasses.

The Andersons promised patients that the hearing aids would be provided to them at no cost and that the business would waive any applicable copay or deductible.

They also offered patients $100 gift cards for referring family members and coworkers for the free hearing tests.

An American Airlines plane at Sky Harbor International Airport in Phoenix, Ariz.(Photo: David Kadlubowski /The Arizona Republic)

In 2012, the pair began to offer the free hearing tests to aircraft mechanics and fleet services clerks at the American Airlines’ airport facilities in maintenance hangars and employee breakrooms.

Attracted by the offer of free sunglasses, the pair often had long lines of employees waiting to be tested.

However, an expert witness explained that the screening that the pair performed, which witnesses described as lasting 3 to 5 minutes, were incapable of producing results that could be used to make a legitimate decision on a need for hearing aids.

Witnesses from Blue Cross testified that these tests also failed to comply with Blue Cross’s medical policies related to the evaluation of hearing impairment.

In November 2013, Blue Cross conducted an audit of Anderson Optical & Hearing and requested copies of patient records for certain American Airlines employees and their dependents.

On January 6, 2014, the Texas Department of State Health Services-Professional Licensing Unit began an investigation regarding a complaint it had received concerning the Andersons.

When given the opportunity to respond to the complaint, the pair submitted several patient records to the state, including some of the same patient records that had been collected by Blue Cross, in February 2014.

The records had altered test scores and additional notations that were not present when the same documents were given to Blue Cross a few months before.